International Business Venezuela

In 1991 the trading realm was constituted among Brazil, Argentina, Uruguay, and Paraguay. The Mercosur was the trading region. The main focus was to create and develop free trade between these countries. In 2006, Venezuela got accepted officially.

It did several changes in its policy rules and regulations and it became member to do the voting. Benefits and Drawbacks for VenezuelaAt the South of Mercosur, Venezuela took some remarkable steps in becoming alliance in the common market. After the hard work Venezuela got full membership of Mercosur, during the summit meeting in Montevideo, Uruguay in the month of December. It joined the greatest free trade that would benefit Venezuela in different sectors. Venezuela, Argentina and Brazil agreed to develop petroleum pipeline within five years.

We Will Write a Custom Case Study Specifically
For You For Only $13.90/page!

order now

“This pipeline would run from Venezuela over Brazilian territory to Manos in the north and then to the northeast, continuing to the south of Brazil, Buenos Aires and Montevideo. The pipeline would extend to between 4,969 and 6,211 miles long and cost up to $10 billion” (Beener, 2008). Venezuela is the rich country in oil reserves which make them third very important trading partner. They become recognized economically and politically in the world. Venezuela broadens the bilateral trade in the region by providing investment and trade opportunities. Venezuela increase their bilateral trade relationship with many countries for example Colombia, Argentina, Brazil, Uruguay, Bolivia, Ecuador, and the Caribbean.

Venezuela can get a lot of benefits from developing long distance pipelines which cost 10 billion dollars and can lead to a lot of opportunities to employees, companies by importing heavy machinery. It will expand the opportunities of healthcare, transportation, trade and other small/big businesses. As President Chavez says that “not only is this historic but we, the heads of state, are responsible for the demands set upon us” to make sure it benefits the 367 million people in the region” (Ellner, et al., 2007). Venezuela can get several benefits, for instance, raw materials, cheap labor, free trade and technology can be transferred to Venezuela from other countries. If they have variety and quality of products, the citizen power of purchasing can grow.

Drawbacks-Opening up of Venezuelan market will make it difficult for domestic small industries to survive alongside foreign established companies, competition will increase. Venezuela’s resources (natural and physical) will be exploited by other member nations (Jones, 2000). In the event of dispute among the member countries, when the pipeline is passing through so many countries and affecting their economy these disputes can have serious consequences. The development of Mercosur was arguably weakened by the collapse of the Argentine economy in 2002 and it has still seen internal conflicts over trade policy, between Brazil and Argentina, for example. My Business PlanMy plan is to set up a Florist business.

I’ll benefit from cheap labor to work as my staff like working in marketing, space, customer attraction), besides I can obtain different seeds for flowers from other member nations which are unavailable in Venezuela. I can also hire skilled manpower for interior designing of my flower shop because the environment of the shop is important to attract customers. Our shop is bound to prosper during the construction period of the pipeline. From all over the country people can come especially flower holidays such as Valentine’s Day, anniversaries and mother’s Day. I have to be innovative in my approach to attract guests, provide services that much budget floral shop may not be offering such as discount on different flowers that grow in other seasons (Beener, 2008). This is now possible under Mercosur due to easy availability of resources.

The drawbacks I can face are increased competition. I will also have to devise ways to retain my staff as other floral shops that come up may offer better incentives and poach trained laboring such as scenario my business might suffer.